#BIOSPAIN2023Interview | "In Spain, access to suitable financing can be a challenge, especially for early-stage startups and emerging companies"

In 2022, Spanish biotechnology companies invested 1.038 billion euros in R&D, according to data collected in the latest AseBio Report. This figure represents a 16% growth compared to the previous year and accounts for more than six percent of the total national investment.

The 'biotech' sector is science-intensive, as evidenced by Spain ranking as the ninth power in terms of scientific production in biotechnology. We are talking about a sector where funding and investment are key factors for the disruptive innovations it produces to transform into tangible benefits for people. This is especially important considering that most of the 'biotech' business fabric in Spain consists of small and micro-enterprises that do not have products on the market, making it challenging for them to generate the necessary resources to finance their activities. They face barriers such as high levels of regulation and complexity in the markets they operate in.

This picture is analyzed in collaboration with Columbus Venture Partners, a Spanish venture capital management company and Bronze Sponsor of BIOSPAIN, an international reference event in the biotechnology sector that will be held in Barcelona from September 26 to 28. We spoke with Damià Tormo, General Partner & Co-founder.

AseBio. What is the current picture of the biotechnology sector in Spain?

Damià Tormo. Currently, we observe that the biotechnology sector in Spain is much more mature. Over the past few years, it has experienced significant growth in new companies, new funds, and increasingly experienced entrepreneurs, building upon a solid foundation of research and public-private collaboration. This has led to the creation of companies that are having a significant impact on the sector, an increase in foreign investments, and the acquisition of these companies by large pharmaceutical groups.

AseBio. What are the main obstacles that 'biotech' companies in Spain face when it comes to financing their projects?

Damià Tormo. In Spain, accessing adequate funding can be a challenge, especially for emerging companies and startups in their early stages. The development of biotechnological products is complex and lengthy, requiring substantial investments to achieve value milestones.

While it's true that the number and size of national funds to finance these companies have increased, it's still not sufficient, and additional funding from international funds is required. In recent years, we have seen a significant increase in investments from international funds in the financing rounds of these companies. However, Spanish companies face the disadvantage that this type of investment in Spain is much less attractive than in neighboring countries, which also influences investors' decisions to fund projects in this field in Spain.

AseBio. What are the specific advantages that Spain offers for biotechnology investments? 

Damià Tormo. Investing in Spanish biotechnology companies presents a significant opportunity due to several competitive advantages. Firstly, the country boasts a robust research infrastructure in this field. It has internationally respected universities and research centers, facilitating collaboration between companies and academic organizations on research and development (R&D) projects.

Additionally, the government and regional authorities provide various incentives and financial support programs to encourage investment in biotechnology R&D. Moreover, Spain is home to a pool of highly qualified professionals in biotechnology. Scientists, researchers, and healthcare professionals with expertise in this field make significant contributions to project development and innovation in the sector.

Lastly, Spain's strategic geographical location is another key advantage, providing access to the European market, one of the largest and most regulated markets globally, facilitating collaboration and trade with other European countries. 
In summary, Spain offers a unique combination of skilled human resources, quality research infrastructure, government support, and a strategic location that makes it an attractive destination for biotechnology investments, with the significant difference of accessing this talent and infrastructure without the inflation and turnover experienced in other countries like the United States.

AseBio. How do you support disruptive innovations that originate in research centers until they are finally commercialized?

Damià Tormo. At CVP, our mission is to support and foster disruptive innovations that originate in research centers. Our approach involves a long-term commitment to take these innovations from the early stages of development to successful commercialization. In fact, of the 30 investments made by CVP to date, half have been founded by the Fund based on this knowledge. 

First and foremost, we identify unresolved medical problems and carefully evaluate emerging projects and technologies to determine their disruptive potential and market viability. This involves a rigorous selection process that takes into account factors such as technological innovation and market demand. 

However, CVP's support goes beyond funding, as we provide strategic guidance and business and scientific management guidance through our team of experts. This includes defining robust business strategies, identifying target markets, and developing effective business models. We collaborate in building teams, helping identify and recruit key talent that strengthens the technical and management capabilities of emerging companies. 

We maintain an ongoing commitment to the companies we invest in. Our goal is to support these disruptive innovations on their path to success and contribute to the advancement of science and technology.

AseBio. What needs to be improved to facilitate the connection between investors and startups?

Damià Tormo. To facilitate the connection between investors and startups, it is essential to create online platforms and events that streamline interaction. Furthermore, transparency, education, and simplification of processes are key. Accelerators, incubators, and mentorship programs also play a significant role in this connection. Tax incentives and favorable regulations can stimulate investment in startups. Collectively, these approaches can strengthen the startup investment ecosystem and promote successful collaborations.

AseBio. What do you expect from your participation in BIOSPAIN?

Damià Tormo. We expect BIOSPAIN to provide us with the opportunity to strengthen our connections in the biotechnology industry and to get to know those biotechnology companies developing the products of the future. Ultimately, we hope that our presence at BIOSPAIN will allow us to play an active role in advancing global science and health through effective investments and collaborations.